Rama Steel Tubes to Acquire Automech Group for AED 296 Million
Filing Summary
Rama Steel Tubes Ltd has announced the acquisition of a 100% stake in Automech Group Holding Limited, registered under the Abu Dhabi Global Market. The acquisition, valued at AED 296 million (approximately Rs. 728 crores), involves Rama Steel Tubes and its wholly-owned subsidiary, RST International Trading FZE. RST International will acquire a 78.38% stake for AED 232 million, while Rama Steel Tubes will acquire 21.62% for AED 64 million. The transaction aims to expand Rama Steel’s geographical presence and diversify its operations across various sectors in the UAE.
Rama Steel Tubes Ltd has approved the acquisition of a 100% stake in Automech Group Holding Limited, a company registered under the Abu Dhabi Global Market. The acquisition involves a share purchase agreement executed among Mr. Jagjit Gouri as the seller, and RST International Trading FZE and Rama Steel Tubes Limited as buyers. The transaction is valued at AED 296 million, approximately Rs. 728 crores.
The financial terms of the acquisition specify that RST International Trading FZE, a wholly-owned subsidiary of Rama Steel Tubes, will acquire a 78.38% stake in Automech Group for AED 232 million. Rama Steel Tubes will acquire the remaining 21.62% stake for AED 64 million. The consideration of AED 64 million will be adjusted through the issuance of fresh equity shares of Rama Steel Tubes, in compliance with the Companies Act, 2013, and SEBI regulations.
The acquisition encompasses Automech Group’s subsidiaries, including Automech Steel Industries LLC, Automech Engineering Co. LLC, and others. The group operates in diverse sectors such as steel fabrications, construction, precision engineering, and marine services. The consolidated turnover of Automech Group as of December 31, 2024, was AED 192.30 million, with assets valued at AED 198.73 million.
The acquisition process is expected to be completed within 5-6 months. The transaction involves a combination of cash and share swap, with AED 232 million in cash and AED 64 million through a share swap. The issue price and share exchange ratio will be determined by an independent registered valuer.
The parties involved in this transaction include Mr. Jagjit Gouri as the seller, and RST International Trading FZE and Rama Steel Tubes Limited as buyers. RST International Trading FZE is a wholly-owned subsidiary of Rama Steel Tubes, and the acquisition does not classify as a related party transaction under the current regulations.
This acquisition is part of Rama Steel Tubes’ strategy to expand its geographical footprint and diversify its operations in the UAE and other regions. The company aims to leverage Automech Group’s expertise in various sectors to enhance its operational capabilities and revenue streams. The acquisition aligns with Rama Steel’s objective to achieve long-term sustainable growth.
Rama Steel Tubes Ltd is a manufacturer and exporter of ERW steel tubes, both black and galvanized. The company focuses on expanding its market presence and enhancing its product offerings to cater to diverse industrial needs. Through strategic acquisitions and partnerships, Rama Steel aims to strengthen its position in the global market.